CFU 107 - Considering Investment? Here's the Cheat Sheet | feat. Matt Bodnar


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My guest today is Matt Bodnar. He is the host of the Science is Success podcast and a part of the Fresh Hospitality Firm. He’s here to share with us today how to get VC investments and whether they’re right for your business.

[01:50] Investment with Fresh Hospitality

Fresh Hospitality invests across the food value spectrum. They invest in farming and agriculture through packaged foods. They also invest in technology, marketing, and accounting that fits around their ecosystem. They're able to add immediate value to their clients. They provide the extra resources needed to help growth.

They are very hands on investors. Matt looks at investing as the discovery of value at one end and the creating of value on the other. Companies they invest in already have good value, but Matt wants to increase their value. There's several ways they provide value to their clients.

There’s a lot of different ways to work with VC’s. Fresh Hospitality works as a traditional private equity firm. They take more stake in the company and become more hands on. Majority of VC’s take on more of a minority position.

[06:12] Matt’s Beginning

After graduation Matt worked on Wall Street for several years. He’s originally from Nashville. His connection there is what brought him into the food and hospitality industry. He found himself in a new dynamic with new challenges. He’s now starting to find opportunities in the food technology space. While still investing in more traditional farming practices.

[07:34] Investment in Crowdfunding and the Entrepreneur

Crowdfunding is one of the top platforms for your start up. It improves customer demand and gives you the startup capital you need. Most people will lean more towards a company that started through crowdfunding. It gives them validation of the product.

It’s important to look at the traction and value of a company when investing. Have your proof of concept ready when approached with an investment. This is something you can get from a successful crowdfunding campaign. Connect yourself with your campaign.

When investing, Matt also looks at the entrepreneur themselves. He wants founders to stay involved with their business and continue to lead. It’s originally their vision so they should be taking lead on the creative side of the business.

Matt likes to focus more on the back end of a business and scaling the business. It’s important for Matt when investing to ensure the company connects with Fresh Hospitality’s current investments. He utilizes the success of his investments to leverage other investment opportunities. He’s found this increases the value of those investments.

[17:08] Investment Decisions Vs. Investment Outcomes

It’s not about the outcome of a decision. It’s about the decision being the right one. Make yourself a decision journal. When you have big decisions coming up, focus on which ones are most important at that moment. Analyze what the decision is and weigh out the outcomes of making the decision. Once you’ve made the decision, analyze what went well and what went bad. By building a log of these decisions you can look back and see how your decision-making skills have grown.

[22:42] Network Towards an Investment

Most of the clients Matt deals with have sought them out. In the beginning they focused more on being active in seeking clients. Now he gets 5-6 deals pitched to him per week. He’s been able to garner this traction from referrals and word of mouth.

The platform in which you send your pitch is important. When receiving pitches from an online form or their website, Matt immediately discards it. If he’s given a warm introduction by someone he knows, he’s more inclined to receive the pitch. It’s a kind of vetting process when it comes to the leads he receives.

Networking goes a long way when asking for an investment. Use your network to reach the people you need to. It’s much easier to pitch an idea when you have a warm intro. Matt likes to receive pitches in person when possible. If not, he’ll ask for a product sample and a 30-minute meeting. He wants to create that personal connection with them before he starts to invest.

[27:23] Are VC Investments Right for You?

If you think VC investing is for you, make sure it’s the right thing for your business. It’s a very different life than bootstrapping. The pressure to grow quickly can lead to investing in areas that don’t create value. This can be what destroys your business. Most people who look for VC investments are aware of the holes in their business. They are looking for someone who can provide that capital or intellectual capital.

Be clear with yourself on what you want. What kind of lifestyle do you want? Are you capable of taking it there? Be honest with yourself.

[30:36] Investments in the Food Industry

In the technology world, most VC’s invest in the seed stage. In the food industry, people lean towards investing in companies that have growth. They’ve already gained traction and have some sort of customer demand. It’s rare to receive investments in the seed stage in the food industry. The more traction you can get the better chance you have at getting an investment.

Word of mouth will help you get traction. There are some investors in the food industry still willing to invest early. Use your connections and network to figure out what the ecosystem is right now. Find the right person for the investment you’re looking for. Look for someone who’s willing to invest in your niche.

[36:56] Show Intensity, Intelligence, and Integrity

Reputation is very important. Don’t sacrifice your integrity for short-term gains. Shortcuts to get ahead end up pulling you back. You can get money easily but building your reputation is difficult. The integrity of an entrepreneur is important for any investor.

Episode Outline

Introduction: How to Find Which Investment is Right for your Business.

[01:50] Investing with Fresh Hospitality

[06:12] Matt’s Beginning

[07:34] Investment in Crowdfunding and the Entrepreneur

[17:08] Investment Decisions Vs. Investment Outcomes

[22:42] Network Towards an Investment

[27:23] Are VC Investments Right for You?

[30:36] Investments in the Food Industry

[36:56] Show Intensity, Intelligence, and Integrity

Resources and Sponsor

Matt Bodnar

The Science of Success Podcast

Fresh Hospitality

Toxic VC TechCrunch

Follow Matt Bodnar @MattBodnar



147 episodes